DG Justice

Financial Analysis

FRC Kick-off meeting

Procedure

The financial officer will:

• assess the financial statement by first checking that:the financial statement is signedthe correct exchange rate has been used in converting costs to eurothe costs reported were foreseen in annex II of the grant agreementthe financial statement has been correctly filled in.

• in most cases request a sample of supporting documents

Important: the payment period of 90days is suspended until receipt of the requested information and documents

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General Requirements

• Costs reported should be registered in the accounting of the beneficiary/co-beneficiaries.

• Beneficiary should set up a cost-revenue centre specific to the project in its accounts.

• Although the final report must be done in euros, cost must be declared in the currency in which they were incurred and converted to euros according to provisions in the grant agreement. E.g. salary in England is paid in GBP therefore cost should be reported in GBP.

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General Requirements

• On request of documentary evidence, only copies of the supporting documents should be sent to the Commission. Originals should be kept with the beneficiary

• Where the amount on the invoice is not the same as the amount reported, please provide an explanation.

• Before starting your project, kindly read the project management guide! http://ec.europa.eu/justice/newsroom/files/programme_management_guide_en.pdf

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Supporting documents required per cost category

6 categories of costs

A – staff B – travelC – equipmentD – consumablesE – other direct costsF – overheads

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Supporting documents – Staff costs

Permanent staff:

- existing contract

- secondment letter with description of tasks, reference of the project, duration, time allocated to the

project, hourly/daily rate

- monthly salary slips

- timesheets – not necessary for staff working full time on the project

- calculation of the hourly/daily rate requested.

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Supporting documents – Staff costsPermanent staff: Civil servants

Besides all documents required for permanent staff we also require the following:• In case of over-time – proof of payment of overtime or proof

of the additional days granted by the public body for compensating the overtime worked in the project

• In case the person is replaced for his normal work - contract of the additionally recruited person

• In case the staff cost does not represent an additional cost – no additional documents are required however please note that these costs are eligible only to the extent that they must be covered by the own contribution to the project and cannot exceed it.

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Supporting documents – Staff costs

Non-permanent staff: specifically recruited for the project

- specific contract linked to the project with indication of tasks, reference of the project, duration, time allocated to the project, hourly/daily rate

- salary slips – if the staff is on the payroll

- Invoices – if the staff concerned is not on the payroll – invoice must indicate the tasks performed, date, number of hours/days worked and the price per hour/day

- Proof of payment by bank transfer

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Calculation of staff costs for staff not fully allocated to the project

• Where: • Annual Gross Salary + Social Charges = costs actually paid by the

beneficiary in the timeframe of a year, including: salary, taxes, employer's contribution for national security schemes etc.

• Total actual annual productive time = total time in days or hours worked in the timeframe of a year. Please note that time used on meetings, activities, training and similar activities are considered as productive working time.

Annual gross salary + social charges

Total actual annual productive working days or hours

X

actual days or hours working on the grant as

substantiated by timesheets

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Common reasons of ineligibility – staff costs

• Staff contracted by organisations other than those mentioned in the grant agreement.

• Daily/hourly rates claimed are those budgeted • Wrong calculation of daily/hourly rates• Inflated daily/hourly rates• Lack of timesheets or unsuitable timesheets provided• Volunteer work costs• Work done outside the eligibility period

For more information on timesheets and the calculation of the daily/hourly rate kindly refer to the project management guide.

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Supporting documents – Travel and subsistence cost

Concerns 2 categories of costs:

Travel: travel costs directly linked to the project (i.e. flight ticket, train ticket, local travel, etc.)

Subsistence allowance: accommodation, meals, local travel within the place of mission

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Supporting documents for the travel costs• Travel invoice

• Transport ticket (boarding pass, train receipts, bus ticket, etc.)

• Travel by car: reimbursement claim – up to the equivalent of first class rail fare

• Proof of payment or reimbursement (in case flight is purchased by a third party and not the beneficiary/co-beneficiaries)

• Signed attendance list (in particular for meetings and conferences)

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Supporting documents for the subsistence allowance

1. reimbursement on the basis of actual costs:- expenses reimbursement claim form- accommodation invoice- all receipts related to food, beverages, local transport,

and other expenses- attendance list signed by the participants- proof of reimbursement (bank transfer is preferred)

2. reimbursement of a lump sum (application of beneficiary’s/co-beneficiaries' policy):

- copy of the policy- reimbursement claim - proof of payment (bank transfer is preferred)- Calculation of the amount paid- Attendance list signed by the participants

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Important notes on subsistence allowance

• Subsistence allowance paid should be according to the normal practice of the beneficiary and within the limits per country set out by the Commission http://ec.europa.eu/europeaid/work/procedures/implementation/per_diems/index_en.htm

• The amount of subsistence allowance/per-diem paid depends on the duration of the travel: each successive 12 hour period is equivalent to 0.5 of the subsistence allowance.

e.g duration of the mission: from 15 January, 11h00 until 18 January, 20h00 = 3.5 Daily allowances (DA)

• Reimbursement should be made by bank transfer. Payment in cash should be avoided

• In case breakfast/ lunch/ dinner is offered during travel the perdiem should be reduced accordingly.

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Common reasons of ineligibility – travel and subsistence allowance

• Missing documents – e.g. missing boarding pass or other proof of travel

• Use of taxi where public transport could have been used.• Undue subsistence allowance paid• Travel and subsistence allowance costs incurred outside the

EU• Missing proof of payment – bank transfer• Subsistence allowance exceeding the threshold per county.

For more information on travel and subsistence allowance paid kindly refer to the project management guide.

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Supporting documents – Equipment

• Invoice showing date of purchase and delivery and proof of payment

• Beneficiary's accounting practice• Calculation of the depreciation amount requested.

Common reasons of ineligibility

• Invoice not addressed to beneficiary/co-beneficiary• Full cost claimed (when this is not in accordance with the

beneficiary's/co-beneficiaries usual accounting practice).• Cost claimed does not reflect the period and percentage

used for the implementation of the grant.

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Supporting documents – Consumables

• Invoice and proof of payment

Common reasons of ineligibility

• Invoice not addressed to beneficiary/co-beneficiary• Cost cannot be linked to the project, cannot be traced or is

part of the normal running costs.• Costs claimed are not consumables but general office

supplies (pens, paper, folders) which are not eligible and are covered by overheads

• Cost not foreseen in annex II of the grant agreement

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Supporting documents for other direct costs and sub-contracting

• Invoices indicating name of publication, number of pages, language, date of service provided, etc.

• Proof of payment – bank transfer showing payment to the supplier

In case activities are subcontracted, the subcontracting rules must be applied

Supporting documents relating to sub-contracting- subcontracting agreement- proof of payment- proof of other offers received - the tender procedure followed

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Common reasons of rejection – other direct costs

• Invoice does not have any link to the project e.g name of publication missing, date activity took place missing, etc.

• Lack of the visibility of the EU financial support and EU logo on publications

• Costs not foreseen in annex II of the grant agreement

• Cost incurred outside the eligibility period. Invoices can be dated outside the eligibility period but the cost must be contracted within the eligibility period and must relate to activities that took place within the eligibility period. In case of publications and audit costs the contract must be signed within the eligibility period. The invoice and proof of payment may then be dated outside the eligibility period.

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No Supporting documents are required. Indirect costs do not need to be justified.

They are calculated as a percentage of eligible direct costs (percentage specified in article I.4.2 of the grant agreement and in no way can exceed 7%) after analysis of the costs by the Commission

Common reasons of rejection

• % overheads requested is higher than that agreed in article I.4.2 of the grant agreement

• The beneficiary/co-beneficiary has an operating grant running within the same period as the action grant.

Indirect Costs

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EX-POST Audit

• Be aware that after the final EC contribution is established, your project could be randomly selected for an ex-post audit

=> all invoices, receipts, supporting documents, accounting records should be available

• Keep all documentation for a period of 5 years after final payment/recovery (Art. II.20)

• As a result of the audit the Commission may recover any payments made to the beneficiary.

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Thank you for your attention!

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